Comptroller General of Customs, Bashir Adewale Adeniyi MFR.

The Nigeria Customs Service NCS has explained its decision to temporarily suspend the proposed implementation of the 4per cent Free-on-Board FOB levy on imported goods as provided in section 18(1)(a) of the Nigeria Customs Service NCSA 2023, saying it is in line with ongoing consultation with the Minister of Finance and Coordinating Minister of the Economy, Olawale Edun.

The Service, which is also planning a comprehensive stakeholder engagement and consultations, says the suspension period would provide an ample time to harmonise the necessary funding frameworks under the old and the new Customs 2023 Act.

According to a statement by the Comptroller General of Customs, Bashir Adewale Adeniyi MFR, signed on his behalf by the National Public Relations Officer, Assistant Comptroller of Customs, Abdullahi Maiwada, the suspension also coincides with the end of the contract agreement with the service providers, including Webb Fontaine, which were previously funded through the 1per cent Comprehensive Import Supervision Scheme CISS.

The Service further argued that the suspension presents an opportunity for a holistic review of its revenue framework. According to him, the previous funding arrangement in the old Customs Act, the 1per cent CISS levy and 7per cent cost of collection were separated, which created operational inefficiencies and funding gaps in Customs modernisation efforts.

He however noted that the new Act of 2023 addressed these challenges by consolidating not less than 4per cent value of imports, which is designed to ensure sustainable funding for critical Customs operations and modernisation initiatives. He further noted that the current transition period will allow the Service to optimise the management of these frameworks to serve our stakeholders and the nation’s interests better.

The statement reads in part: “The Nigeria Customs Service (NCS) hereby announces the suspension of the implementation of 4per cent FOB value on imports as provided in Section 18(1)(a) of the Nigeria Customs Service (NCSA) 2023. This is sequel to ongoing consultations with the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun and other stakeholders.

“This suspension will enable comprehensive stakeholder engagement and consultations regarding the Act’s implementation framework. The timing of this suspension aligns with the exit of the contract agreement with the Service providers, including Webb Fontaine, which were previously funded through the 1per cent Comprehensive Import Supervision Scheme (CISS). This presents an opportunity to review our revenue framework holistically.

“Under the previous funding arrangement repealed by the NCSA 2023, separating the 1% CISS and 7per cent cost of collection created operational inefficiencies and funding gaps in Customs modernisation efforts. The new Act addresses these challenges by consolidating ‘not less than 4% of the Free-on-Board value of imports’, designed to ensure sustainable funding for critical Customs operations and modernisation initiatives. This transition period will allow the Service to optimise the management of these frameworks to serve our stakeholders and the nation’s interests better.

“The Act further empowers the Service to modernise its operations through various technological innovations. Specifically, Section 28 of the NCSA 2023 authorises developing and maintaining electronic systems for information exchange between the Service, other government agencies, and traders. The Service is already implementing several digital solutions, including the recently deployed B’Odogwu clearance system, which stakeholders are benefiting from through faster clearance times and improved transparency. Other innovative solutions authorized by the Act include; Single Window implementation (Section 33), Risk management systems (Section 32), Non-intrusive inspection equipment (Section 59) and Electronic data exchange facilities (Section 33(3).

“The suspension period will allow the Service to further engage with stakeholders while ensuring proper alignment with the Act’s provisions for sustainable funding of these modernisation initiatives. The NCS remains committed to implementing the provisions of the Act in a manner that best serves our stakeholders while fulfilling our revenue generation and trade facilitation mandate. We will communicate the revised implementation timeline following the conclusion of stakeholder consultations.”